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Fake equity
I get a lot of deals sent to me where they present equity cushion based on ARV. Unfortunately, I can't calculate equity off anything other than today's value. If the house is worth 200K today, reno costs 50K, ARV is 300K and the loan request is 225K. We're not at 75% LTV. We're at 112.5% LTV.
0 likes • Jun 15
I agree. Great point on how todays as-is value calculations holds more underwriting integrity than tomorrows arv assumptions. the margin for error on a fix and flip is dictated by how much equity is backed into the deal on entry... the larger the equity position at entry the more wiggle room for cost inaccuracy and still potentially be profitable.
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Shade Tree
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@shade-tree-1956
Helping new private lenders evaluate deals, assess borrowers, and protect capital with clarity and confidence.

Active 10d ago
Joined Jun 3, 2026